Pendings slide, AWC up again
Sales to Top 8000 for July, less than June
Inventory falls slightly again
PENDING: 12,842 ( -97 from last week)
Pending Single Fam: 11,431 ( -81 from last week)
AWC: 5,690 ( +95 from last week)
AWC Single Fam: 5,057 ( +71 from last week)
Closed 7/20-7/26 : 1,853 ( -165 from last week)
Closed Single Fam: 1,647 ( -126 from last week)
Active Listings: 31,695 ( -97 from last week)
Active Single Fam: 24,350 (-109 from last week)
Closed MTD 7/26: 6,362
Closed MTD Single Fam: 5,607
The numbers don't tell us a whole lot as we get close to closing out July. The number of pendings seems to have done its normal peak in June, signifying that we have likely reached our potential best selling range. July is shaping up to be seasonally in line with what normally happens after June. This implies that these are not just recovery numbers that will continue to rise, but are the actual market numbers. This is good and bad; this means that we won't have continued growth in sales, which in a recovery period would be very nice to see; but it also means that because they are not growth numbers, these are probably long term sustainable levels of sales, which are very healthy numbers. We might see things kick up a bit in September, but this is our selling range here, between 8000 and 10000 sales a month.
Conservatively, you might say we will only achieve another 1800 sales this month, which would put us over 8000. This is the low end, as statistically the last week is always stronger than this week, for example. So we can expect that at the minimum. A more realistic number may approach 2500, which would take us to approaching 9000 sales. I would consider that to be a more accurate assessment of where we are going to finish. I don't see great potential for climbing over 9000, but its possible.
Going back to the pending numbers, we seem to have hit our ceiling for that statistic, and have retrenched a little. I don't know if that is because homes are now selling quicker, with less hangups, as we aren't losing a lot in the way of overall sales by the end of the month, or if the short sale escrows are instead being placed in AWC, which is still rising. There are certainly sufficient numbers of pending sales, but the slight retrenchment troubled me for a while. We have been getting good consistent weekly sales now, even if those numbers are off their highs, so it be a little overanalysis on my part.
Inventory drops seems to have leveled off. We have reached a point where the excess has been mostly sold off, and we are now at a level of three or so months worth of homes, which is a normal market that will cause small price upticks. As I had earlier posted, national stats have now shown a slight price increase for U.S. homes, which is an indicator that we have reached a bottom in prices as well as in the oversupply of inventory. We also had the surprise announcement of the increase in new home sales at a pretty solid 11%, which will eventually spur consumer confidence, although consumer confidence lagged in July. This is somewhat of a lagging indicator and I expect to see that number better in the later summer. We do have the difficulty of what looks like a jobless recovery, so we have to see how that plays out.
It was a good solid week for sales, and we should have an acceptable level of sales in July. It would be nice to see continued growth in demand, but demand at this level is acceptable, and will continue to push prices upwards. The bogeyman still out there is how long the supply of foreclosure homes holds out. We know they are out there, and potentially more may come available.
Off point a little is the announcement of this anti-deficiency law that Arizona passed, essentially bypassing consumer protections from banks should they foreclose on a home you have not lived in. This law allows them to pursue you for the deficiency, which would be devastating for so many people. This was not a well-thought plan by the legislature, and was done at the behest of bank lobbyists. The big problem with it is the law of unintended consequences- their purpose, they say, is to prevent "investors" from not paying them back simply because its upside down, so they have to live in the property for six months in order for it to be classified as a residential home. The problem is that these kind of investors are few and far between, and what is really far more common is the individual with the second home, or a vacation home, or the homeowner who got caught in the middle of buying a new home, and couldn't get theirs sold before the market went south. The banks, of course, realize this, but as long as they can get the law rewritten so they can get their nose back into the trough for as much as they can, they don't care. Its a travesty that our legislature, which is supposed to look out for the consumer, is so clearly in the banks' pockets. This is especially disconcerting, as they claim its not retroactive, but anybody who is already in a home who is only starting to lose it is subject- in fact, the bank can hold off foreclosure until post september 30, and make those people subject. Call your legislator, and ask him or her if they support this noxious bill. They will get the message. Personal responsibility is one thing, but to cause the personal ruin of tens of thousands of people in this state is not in our best interests.
I will get off my soapbox now, but have a great week.
Tuesday, July 28, 2009
Tuesday, July 21, 2009
ARMLS STATS 7/13-7/19/09
News media finally seeing the light?
Pendings Fall; but Sales top 2K for the week.
Listings and AWC flat as summer takes hold.
PENDING SALES: 12,939 ( -306 from last week)
Pending Sin. Fam. 11,512 ( -261 from last week)
AWC: 5,595 ( +14 from last week)
AWC Single Fam: 4,986 ( +22 from last week)
CLOSED 7/13-7/19: 2,018 ( +494 from last week)
Closed Single Fam: 1,773 ( +441 from last week)
Active Listings: 31,792 ( -16 from last week)
Active Single Fam: 24,459 ( - 1 from last week)
CLOSED MTD (7/19): 4,474
Closed Single Fam: 3,924
Pendings fell sharply, but this is probably due to the increased number of sales that closed this week. 2,000 sales is very good for a middle week. It seems we have reached our natural inventory levels, as listings declines have now flattened out. We are likely to see some weeks where listings increase again. From what I heard from some local realtors, they had some slow weeks from buyers when rates climbed back up for a while; rates have fallen again, however, and applications have risen solidly.
Sales remain good; not as good as June, which is typical, but pretty good nonetheless. We will expect that July will finish in the 8000's in overall sales, which of course is down from July, but it is still a very strong number. I expect the number of listings to climb a bit as well, before being pushed down in September. We are likely to have a small W-Shaped recovery, as many people are dealing with job losses and there is likely to be a high inventory level for a while. It may not be overwhelming, but it might be steady for a while.
I think the most interesting development this week is how the national news media seems to be turning the corner from the gloom and doom it has been spouting. All of a sudden, Oil is up on better housing news, and rates are low, and signs of stability as we have reached 12 months of falling supply.
This is the very best thing for our industry, as it is the consumer psyche that drives the idea of whether a major investment such as a home is a good idea or not. Put all the stimulus you want out there, but if someone thinks the value of their home is going down over the near term, they aren't buying it. We seem to have some changes in how people are perceiving the economy; all of the positive earnings reports coming out are doing a lot of the heavy lifting right now. The news on the street is good, so the commentators sound more pleased, and this gives people more hope that stability is here. Many pundits are saying the see the recession coming to an end very shortly. With that kind of talk dominating the airwaves in the last few weeks, it is no wonder that we are starting to see a shift out of depression mentality, and one that is more hopeful for recovery. Housing news is getting better, and while what we see right now may be as good as it gets for a while in terms of demand, we could live with that. We don't need to see 2005 again to have a healthy industry.
I do think we are going to see a bit of a lull here in July and parts of August, but we should have an excellent September. October is too hard to predict, as we have that expiring tax credit, and there may be a lot of people who want to get in under the wire of November 30th. There could be an artificial boomlet in those two traditionally weaker months.
We are still going in the right direction, with good sales numbers, high buying activity, and relatively low inventory. We are also seeing prices climb, and for the first time, there seems to be optimism in the news media that housing is turning around. That is really the first time I can say that has been the case for several years, and it is one of the crucial steps in regaining consumer confidence in investing in a home.
Pendings Fall; but Sales top 2K for the week.
Listings and AWC flat as summer takes hold.
PENDING SALES: 12,939 ( -306 from last week)
Pending Sin. Fam. 11,512 ( -261 from last week)
AWC: 5,595 ( +14 from last week)
AWC Single Fam: 4,986 ( +22 from last week)
CLOSED 7/13-7/19: 2,018 ( +494 from last week)
Closed Single Fam: 1,773 ( +441 from last week)
Active Listings: 31,792 ( -16 from last week)
Active Single Fam: 24,459 ( - 1 from last week)
CLOSED MTD (7/19): 4,474
Closed Single Fam: 3,924
Pendings fell sharply, but this is probably due to the increased number of sales that closed this week. 2,000 sales is very good for a middle week. It seems we have reached our natural inventory levels, as listings declines have now flattened out. We are likely to see some weeks where listings increase again. From what I heard from some local realtors, they had some slow weeks from buyers when rates climbed back up for a while; rates have fallen again, however, and applications have risen solidly.
Sales remain good; not as good as June, which is typical, but pretty good nonetheless. We will expect that July will finish in the 8000's in overall sales, which of course is down from July, but it is still a very strong number. I expect the number of listings to climb a bit as well, before being pushed down in September. We are likely to have a small W-Shaped recovery, as many people are dealing with job losses and there is likely to be a high inventory level for a while. It may not be overwhelming, but it might be steady for a while.
I think the most interesting development this week is how the national news media seems to be turning the corner from the gloom and doom it has been spouting. All of a sudden, Oil is up on better housing news, and rates are low, and signs of stability as we have reached 12 months of falling supply.
This is the very best thing for our industry, as it is the consumer psyche that drives the idea of whether a major investment such as a home is a good idea or not. Put all the stimulus you want out there, but if someone thinks the value of their home is going down over the near term, they aren't buying it. We seem to have some changes in how people are perceiving the economy; all of the positive earnings reports coming out are doing a lot of the heavy lifting right now. The news on the street is good, so the commentators sound more pleased, and this gives people more hope that stability is here. Many pundits are saying the see the recession coming to an end very shortly. With that kind of talk dominating the airwaves in the last few weeks, it is no wonder that we are starting to see a shift out of depression mentality, and one that is more hopeful for recovery. Housing news is getting better, and while what we see right now may be as good as it gets for a while in terms of demand, we could live with that. We don't need to see 2005 again to have a healthy industry.
I do think we are going to see a bit of a lull here in July and parts of August, but we should have an excellent September. October is too hard to predict, as we have that expiring tax credit, and there may be a lot of people who want to get in under the wire of November 30th. There could be an artificial boomlet in those two traditionally weaker months.
We are still going in the right direction, with good sales numbers, high buying activity, and relatively low inventory. We are also seeing prices climb, and for the first time, there seems to be optimism in the news media that housing is turning around. That is really the first time I can say that has been the case for several years, and it is one of the crucial steps in regaining consumer confidence in investing in a home.
Tuesday, July 14, 2009
ARMLS STATS 7/6-7/12/09
Pendings & AWC Rise
Active Listings Fall slightly
PENDING SALES: 13,245 ( +375 from last week)
Pending Single Fam: 11,773 ( +316 from last week)
AWC: 5,581 ( +115 from last week)
AWC Single Fam: 4,964 ( +104 from last week)
CLOSED: 1,524 ( -994 from last week)
Closed Single Fam: 1,332 ( -887 from last week)
Active Listings: 31,808 ( -170 from last week)
Active Single Fam: 24,460 ( -73 from last week)
Closed MTD July: 2,412
Closed MTD Sing. Fam: 2,111
Pending sales rebounded last week from the holiday weekend, which shows there is still deep demand for housing. The demand is still at the lower end of the pricing spectrum with 2304 of the 2412 sales in July so far selling for under $500,000 or under. This is a trend we expect to see for a while, as financing for higher priced homes has lagged available mortgages for entry level properties. There also seems to be a national trend showing continuing demand, as mortgage applications continue to climb.
Active with contingency contracts are higher, but this is probably a mixed blessing-some of the increase is undoubtedly short sales, which tend to clog up the system longer than most sales. There is some evidence that much of the current AWC inventory is short sales- most of the best priced property is of course either lender owned or short sale properties, so this would make sense. The actual numbers are unclear; the statistic is not well-defined on MLS, and I am going to do some checking to see if I can nail that down. The statistic literally shows every home in AWC as being a short sale, which I don't think is the case, as there are significant other sales out there.
The silver lining of this statistic is that our actual monthly sales should be even higher, but these sales are pushed out another 2-3 months in some cases. This has a significant impact on monthly closings, so demand is actually better than what our closings show. What is not positive about this is that there are still so many short sales. The reality is that inventory is weighted heavily with short sales and lender owned properties. As this is the case, they also become a substantial portion of sales. The fact is, we have a bottleneck in sales due to lenders holding up short sales. We may not love the kind of sale it is, but it is still a sale, and for the most part, short sales will sell at "closer to market" prices than will lender owned repos, so we need to look at them as very relevant to the market. Banks need to start allowing a better flow for short sales; they are simply postponing the inevitable anyway.
There is not a lot of other info to be gleaned from statistics this week; it is too early to tell how this month will end up, and while active listings have continued to fall, the level has fallen to its potential lows given the economy and employment factors. Buyers are still buying, but we are going to continue to see some people who will not be able to hold on to their home as their income dissipates. We are not out of the woods, but let's look at what our housing market has accomplished in the last six months-we went from disaster to being back to normal levels of inventory and sales, and while sales are at lower prices, even those are starting to rebound. Hopefully, we are one of the states tha can experience a little job growth over the second half of this year, and change the psyche of the consumer to a more positive outlook.
Active Listings Fall slightly
PENDING SALES: 13,245 ( +375 from last week)
Pending Single Fam: 11,773 ( +316 from last week)
AWC: 5,581 ( +115 from last week)
AWC Single Fam: 4,964 ( +104 from last week)
CLOSED: 1,524 ( -994 from last week)
Closed Single Fam: 1,332 ( -887 from last week)
Active Listings: 31,808 ( -170 from last week)
Active Single Fam: 24,460 ( -73 from last week)
Closed MTD July: 2,412
Closed MTD Sing. Fam: 2,111
Pending sales rebounded last week from the holiday weekend, which shows there is still deep demand for housing. The demand is still at the lower end of the pricing spectrum with 2304 of the 2412 sales in July so far selling for under $500,000 or under. This is a trend we expect to see for a while, as financing for higher priced homes has lagged available mortgages for entry level properties. There also seems to be a national trend showing continuing demand, as mortgage applications continue to climb.
Active with contingency contracts are higher, but this is probably a mixed blessing-some of the increase is undoubtedly short sales, which tend to clog up the system longer than most sales. There is some evidence that much of the current AWC inventory is short sales- most of the best priced property is of course either lender owned or short sale properties, so this would make sense. The actual numbers are unclear; the statistic is not well-defined on MLS, and I am going to do some checking to see if I can nail that down. The statistic literally shows every home in AWC as being a short sale, which I don't think is the case, as there are significant other sales out there.
The silver lining of this statistic is that our actual monthly sales should be even higher, but these sales are pushed out another 2-3 months in some cases. This has a significant impact on monthly closings, so demand is actually better than what our closings show. What is not positive about this is that there are still so many short sales. The reality is that inventory is weighted heavily with short sales and lender owned properties. As this is the case, they also become a substantial portion of sales. The fact is, we have a bottleneck in sales due to lenders holding up short sales. We may not love the kind of sale it is, but it is still a sale, and for the most part, short sales will sell at "closer to market" prices than will lender owned repos, so we need to look at them as very relevant to the market. Banks need to start allowing a better flow for short sales; they are simply postponing the inevitable anyway.
There is not a lot of other info to be gleaned from statistics this week; it is too early to tell how this month will end up, and while active listings have continued to fall, the level has fallen to its potential lows given the economy and employment factors. Buyers are still buying, but we are going to continue to see some people who will not be able to hold on to their home as their income dissipates. We are not out of the woods, but let's look at what our housing market has accomplished in the last six months-we went from disaster to being back to normal levels of inventory and sales, and while sales are at lower prices, even those are starting to rebound. Hopefully, we are one of the states tha can experience a little job growth over the second half of this year, and change the psyche of the consumer to a more positive outlook.
Tuesday, July 7, 2009
MLS STATS 6/29-7/5/09
***JUNE CLOSINGS: 9,359***
Pendings Fall in first week of July
AWC still rising slowly
Listings Fall again to 31K's
**2.95 months of single family inventory**
PENDING: 12,870 ( -600 from last week)
Pending Single Fam: 11,457 ( -538 from last week)
AWC: 5,466 ( +43 from last week)
AWC Single Fam: 4,860 ( +32 from last week)
Closed 6/29-7/5/09: 2,518 ( +485 from last week)
Closed Single Fam: 2,219 ( +423 from last week)
Active Listings: 31,978 ( -539 from last week)
Active Single Fam: 24,533 ( -390 from last week)
CLOSED JUNE '09: 9,359 ( +123 from May '09)
Closed Single Fam: 8,311 (+68 from May'09)
June finished up decently enough to surpass May's sales, giving us our best month of the year so far. It was a slight rise, but the numbers very much reinforce that we are in a period of recovery in housing. July will likely be slightly lower, but still strong, as will August. September last year was our best month of 2008, so we are likely to see some continuing strength in the market for at least the next several months, and we are likely to surpass all of 2008 sales in the middle of August!
Interestingly, AWC contracts continue to rise-not sharply, but it is still up. It is a predictor, but I don't think it is an accurate predictor of what July sales might be. I don't expect July to surpass June's, but we don't know that for sure. Our pendings are a little light, as the end of the month sales take effect. We will see if the number bounces back next week; if it doesn't, I would expect we will see a sales range in the 8K's in July.
We are still seeing inventory drop, which given the dire predictions for June listings, is a very positive sign. The drop isn't as pronounced now, as we continually work with smaller numbers, but smaller inventory gives builders cause to start thinking about building and competing again with resale homes. If you do the math on the single family figures above, you will find the 2.95 month of single family inventory. 24,533 divided by the 8,311 sales = 2.95 months. This is a significant milestone. It is not likely to stay under three months of inventory, but it is an important milestone when considering whether we are in recovery or not.
One of the most interesting examples of this inventory shakeout that I have seen is in Maricopa. The fact is, Maricopa is one of the hardest hit areas for foreclosures due to it rapid run up in prices, and its relative remoteness from places of employment. The price was not justifiable, and many people who overpaid chose to walk away. But, at the right price, this community is very much in demand. Here is the current situation. There are 406 active single family listings in Maricopa- not overly high for the size of the community it has become. There are 444 pending single family sales in Maricopa! If you bring in the AWC contracts, which I am sure contain a large contingent of short sale contracts that languish in AWC for a while, there are 688 homes under contract! This looks to be a relatively new rush to Maricopa, as there were only 273 single family homes sold in June-this bears watching to see if these homes start closing at a more rapid rate, but 273 homes sales give active listings of 444 is a pretty strong number. I am quite sure many listings that are in maricopa aren't listed as maricopa, as they are rural, but this area looks like a builder opportunity in the next year. It is good to see demand back for Pinal County.
Not to belabor the point, but the idea that we are currently working with less than 3 months worth of inventory is mind boggling considering where we started the year. Yes the dollar totals are bad comparatively to other years, but we knew that-what is important that new buyers are feeling confident enough to buy, and it is driving the market forward. We still have excellent interest rates, value in the pricing across a broad spectrum of housing, and financing is getting easier. Obviously, we have employment issues in the US, but despite that, our housing situation continues to improve. Its not perfect, but its improving, at least locally. Less than three months of inventory is the basis of a formula for home prices going up, which they did in June. It is a very broad measure, but the MLS statistic shows the median sale price went from $119,700 in May, to $125,000 in June. It is not a detailed analysis, but that is a sharp gain. Even more hopeful is that single family median prices went from $121,500 to $130,000! That is a sign that demand is starting to push prices.
There are many reasons for optimism that the market is finally turning, and the fact that we have a fairly low supply and and prices are rising fairly sharply should tell you something. We have a lot of economic challenges, without a doubt, but at the same time, for a metro area that is highly reliant on the real estate industry, we can point to our biggest economic and employment engine and say its getting cranked up again. We might be 6 months away from the news feeling good about it, but the statistics don't lie- we are selling homes at a good clip, and we are starting to sell homes at higher prices. A couple of very important conditions when considering the direction of our housing market.
Pendings Fall in first week of July
AWC still rising slowly
Listings Fall again to 31K's
**2.95 months of single family inventory**
PENDING: 12,870 ( -600 from last week)
Pending Single Fam: 11,457 ( -538 from last week)
AWC: 5,466 ( +43 from last week)
AWC Single Fam: 4,860 ( +32 from last week)
Closed 6/29-7/5/09: 2,518 ( +485 from last week)
Closed Single Fam: 2,219 ( +423 from last week)
Active Listings: 31,978 ( -539 from last week)
Active Single Fam: 24,533 ( -390 from last week)
CLOSED JUNE '09: 9,359 ( +123 from May '09)
Closed Single Fam: 8,311 (+68 from May'09)
June finished up decently enough to surpass May's sales, giving us our best month of the year so far. It was a slight rise, but the numbers very much reinforce that we are in a period of recovery in housing. July will likely be slightly lower, but still strong, as will August. September last year was our best month of 2008, so we are likely to see some continuing strength in the market for at least the next several months, and we are likely to surpass all of 2008 sales in the middle of August!
Interestingly, AWC contracts continue to rise-not sharply, but it is still up. It is a predictor, but I don't think it is an accurate predictor of what July sales might be. I don't expect July to surpass June's, but we don't know that for sure. Our pendings are a little light, as the end of the month sales take effect. We will see if the number bounces back next week; if it doesn't, I would expect we will see a sales range in the 8K's in July.
We are still seeing inventory drop, which given the dire predictions for June listings, is a very positive sign. The drop isn't as pronounced now, as we continually work with smaller numbers, but smaller inventory gives builders cause to start thinking about building and competing again with resale homes. If you do the math on the single family figures above, you will find the 2.95 month of single family inventory. 24,533 divided by the 8,311 sales = 2.95 months. This is a significant milestone. It is not likely to stay under three months of inventory, but it is an important milestone when considering whether we are in recovery or not.
One of the most interesting examples of this inventory shakeout that I have seen is in Maricopa. The fact is, Maricopa is one of the hardest hit areas for foreclosures due to it rapid run up in prices, and its relative remoteness from places of employment. The price was not justifiable, and many people who overpaid chose to walk away. But, at the right price, this community is very much in demand. Here is the current situation. There are 406 active single family listings in Maricopa- not overly high for the size of the community it has become. There are 444 pending single family sales in Maricopa! If you bring in the AWC contracts, which I am sure contain a large contingent of short sale contracts that languish in AWC for a while, there are 688 homes under contract! This looks to be a relatively new rush to Maricopa, as there were only 273 single family homes sold in June-this bears watching to see if these homes start closing at a more rapid rate, but 273 homes sales give active listings of 444 is a pretty strong number. I am quite sure many listings that are in maricopa aren't listed as maricopa, as they are rural, but this area looks like a builder opportunity in the next year. It is good to see demand back for Pinal County.
Not to belabor the point, but the idea that we are currently working with less than 3 months worth of inventory is mind boggling considering where we started the year. Yes the dollar totals are bad comparatively to other years, but we knew that-what is important that new buyers are feeling confident enough to buy, and it is driving the market forward. We still have excellent interest rates, value in the pricing across a broad spectrum of housing, and financing is getting easier. Obviously, we have employment issues in the US, but despite that, our housing situation continues to improve. Its not perfect, but its improving, at least locally. Less than three months of inventory is the basis of a formula for home prices going up, which they did in June. It is a very broad measure, but the MLS statistic shows the median sale price went from $119,700 in May, to $125,000 in June. It is not a detailed analysis, but that is a sharp gain. Even more hopeful is that single family median prices went from $121,500 to $130,000! That is a sign that demand is starting to push prices.
There are many reasons for optimism that the market is finally turning, and the fact that we have a fairly low supply and and prices are rising fairly sharply should tell you something. We have a lot of economic challenges, without a doubt, but at the same time, for a metro area that is highly reliant on the real estate industry, we can point to our biggest economic and employment engine and say its getting cranked up again. We might be 6 months away from the news feeling good about it, but the statistics don't lie- we are selling homes at a good clip, and we are starting to sell homes at higher prices. A couple of very important conditions when considering the direction of our housing market.
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